Redemption Is At Hand
With everything that happens in the world of Sirius XM, it’s easy to forget the little nuances that have occurred in recent weeks. It seems like years ago, but it was just 1 month ago when Mel Karmazin was speaking at a Merrill Lynch conference.
It was that very conference which sent Sirius XM stock plummetting to its current lows. I wrote about it immediately in an article titled “Why Is Sirius XM Going Down?” It was in that conference when Mel, speaking in general terms, was taken literally for each and every word he spoke. The end result was a perception that Sirius XM was lowering guidance. Every firm on Wall Street adjusted their models downward to reflect the numbers the company had provided.
The faithful readers of SiriusBuzz and listeners of SiriusBuzzRadio will know that I had stated my belief that these numbers were inaccurate but that the street took them as law. One example of low-balling was a conservative estimate of an expected 19.5 million subscribers by year end.
According to Satwaves.com however, today Mel indicated that the company currently HAS 19.5 million subscribers! This would make over 20 million entirely plausible by year end, and would mean that every analyst on the street would need to revise their forecast models upwards.
I find it ironic that the street took Mel’s last statement as the Word of God, yet this one seems to have been completely ignored. Q3 results could prove very interesting. Stay tuned!
Position: Long SIRI
Stay tuned? Where am I gonna go? LOL. I’ve been held virtual prisoner in this stock for 3 years now.
But I’ll jump on the “3Q could be interesting” bandwagon.
Yipeeeeeeeee! 🙂
Brandon
20M is not only possible, but highly probable. I’m thinking 20.2-20.4M by year end if Ala carte and Best of increase subs like we all think they will.
Friggin
Siri is like the girl that our mother’s warned us about. she will tease you mercifully, strip you down, take your wallet, and leave you hangin wanting more!
I wish my mom had warned me about girls like that…and stock like SIRI too.
Since there is no audio that I know of available of the conference, we a relying on reporters to translate what he said accurately. I wonder why Rueters and DJ didn’t catch this and report that subs were ahead of schedule? Where is the financial press?
its obvious he was lowballing but i think #1 has to be the balance sheet, cutting costs, having positive cash flow beginning of 2009 and throughout the year–With the lowered costs in place and a pos flow, getting creditors to re-up in a good way interest wise shouldnt be a problem then-if if and if
Call Paul Blalock and ask him to confirm what Mel said about 19.5 subs now. I will reiterate why Sirius is trading at these levels. Pure manipulation of the stock. No matter what is said or company produced, SiriusXM will not be going up. The powers to be GS, NAB and Clear Channel are attempting to BK SiriusXM. Until Mel fights back, we will continue to drop. Remember, the debt has always been there, it did not just appear out of thin air. Every analyst knew about the 2009 debt. But they still put out price targets from $4-$9 prior to and just after merger approval. Again, what has changed? Don’t tell me the economy as an answer.
Brandon, you got mentioned on the Stern show this morning
I heard it also. Brandon, congrats on getting your article reagrding the LA Times story mentioned by Howard this morning.
Chizzle, what was said?
Not to spoil the party, but this coming Monday is 30 days from the last time Sirius closed at $1.00, whether it was on the bid or not.
Does this mean a delisting notice is sent out and stock gets temporarily hit down again into the .30’s ?
I may start buying here again, but still very cautious of a 15% drop to .35 cents before it heads higher again.
SXM, Brandon has commented on the impact of being sub $1, and he may pipe in again, but my understanding is that it is no big deal for an extended period. As I post, I am getting ready to pull the trigger again to average further down. Others have commented on the manipulation, and one poster in fact said he contacted Sirius XM IR and gave them the contact info for an investigator who looks into manipulation. Don’t know where that would lead (GS, others?) but also not focused on it. As the top posters on this blog have said time and again Sirius XM is a long term winner if it can handle its ’09 debt load–and we now know from Mel himself that he is confident about handling the Feb. debt. Why hasn’t SIRI popped on the news? Manipulation? Don’t know for sure but I’m confident enough to continue to stay and add to my long position today (if my limit price gets hit). Good hunting.
SXMInvestor,
It will not be 30 days yet, because it is business days – not calendar days…
A brief PS: In Jon Markman’s book, “swing trading power strategies to cut risk and boost profits,” Markman includes a chapter that covers successful trader Richard Rhodes. Rhodes’ system includes the following step that would, if SIRI was a “normal” stock, make a lot of us longs look foolish: “Never add to a losing trade, or ‘average’ into a position. If you are buying then each new buy price must be higher than the previous buy price.” Okay, normally this is a good step or rule to follow–but what is “normal” for SIRI, which gets shorted mercilessly and arcs over and trends down after good news? Look at the news yesterday and the effect on the stock today. Look back at past good-news announcements and how they were interpreted by suspicious analysts, pundits, and lazy members of the financial press that won’t dig deep enough to reveal what SIRI longs (amanteurs like me and professionals alike) have surmised about manipulation. So, “never average [down] into a position?” That rule for this stock does not seem to apply–so I hope that my limit price gets hit today and I pick up another bundle of shares.
SEND A EMAIL TO THEM TOO…I DID and received this surprise response.
Thank you for your email below in which you expressed concerns about naked short selling and reinstating the uptick rule. We are aware of significant concerns on the part of many individuals and entities about these issues and we appreciate your bringing this information to our attention.
The Office of Inspector General (OIG) has an ongoing audit into the SEC Division of Enforcement’s process for responding to complaints and referrals, including those pertaining to naked short selling. Please be advised, however, that the OIG has limited jurisdiction and lacks authority to reinstate the uptick rule or to directly enforce against naked short selling. Therefore, we have forwarded your email to both the SEC’s Division of Enforcement and Office of Investor Education and Assistance for their review. You may also contact those offices directly at [email protected] and [email protected].
Sincerely,
Natasha Dandridge
Legal Assistant
On behalf of the Office of Inspector General
of the U.S. Securities and Exchange Commission
Demian,
Thanks for pointing that out on the 30 business days.
Has it been 30 business days since it initially went under $1.00 because there was still some concern that when it touched 1.00 on about Sept 19th, it was not on the bid ?
I’m not sure it could mean much because Sirius will report in about 3 weeks and Nasdaq will likely extend timelines because of horrific market conditions, but it still could have a bad affect on stock on news leaking that they received a letter.
Limit order triggered–so in deeper now and as long as ever….
I just called Sam Bezek (202) 551-4594, attorney, Div. of Enforcement, at the S.E.C. and I left a message saying that they, and particularly the Chairman, Christopher Cox, are MORONS for not previously ’til tomorrow enforcing existing rules against naked short selling and FOR REMOVING THE “UPTICK RULE” – all of which has GREATLY CONTRIBUTED TO THIS CARNAGE IN SIRI AND IN THE MARKET GENERALLY. I urge you all to call and also condemn them.
I don’t think there is anything in the near future that will significantly move this stock up save a buyout or partnership.
Hate to say it(as I’m down $30K in this stock), but save your money for stocks with some potential.
Mel is asking for patience from investors to give him time to get the debt refinanced.
I have to tell you Mel, I have all the patience in the world if I knew you could actually pull it off.
Take $ 25,000 for example as an investment at .40 cents. This will yield 62,500 shares and I would love to take that back up to $ 2.50 cents and take in about 120k to stem off a good chunk of losses.
But to ask for patience when there is no guarantee of financing could be another loss of 25k on top of the massive losses I and others have already taken.
This is the problem right now with the stock since you get raped if you try and finance now and how long will it take to get better.
If your out of this stock, you have no chance of getting you $ back, but at least your safe.
What to do ?
I know I personally would like to see .33 cents before I dump my $ back in again. Only 6 cents from .39 again today, so it’s not inconceivable.
Even at .33, it doesn’t guarantee it doesn’t go to Zero if the recession is much deeper and financing cannot be obtained in time or are just too ugly again.
This is the dilemma here.
Will you guys please bring some conversation over to the SIRI intraday thread over in the stock talk section of the Siriusbuzz forums?
pm, swing tradeing is when you hold a stock for a couple days to a couple weeks at most, and only sometimes applys.
investing long term , the avg. down method is a good play if your confident in the company’s future.
position long sirixm,..,attitude, patience.!
were in the eye of a finanical storm right now.
we would all love to wake up tomarow with good news and a big pop but even good news during this current mess of a market would’ent be very effictive.
mel & crew are aware of this and awaighting the right time , let the storm settel a bit , feb. is 3+ months from now.
meanwhile it leaves us with great oppertunity!
I just spoke with Shirly from IR. It seems Mel’s comments about the 19.5 M subscribers may have been taken out of context. She says the guidance from the September Merril CC still stands… 19.5M by EOY. But, she informed me that we’d get an update in early November during the Q3 CC.
That said, I’m not sure how much info these folks from IR really have… guess we’ll have to wait.
I’ve noticed, not a hard observation, that the market is pricing the worst case scenarios into most equities. And, less than refinancing, profitability or both, Sirius XM Radio will continue to trade much lower than we would place fair value.
This stock is no longer a play on subscribers, as it hasn’t been for a long time. And I’m sorry that Tyler Savory, in his all-knowing-ness, is suggesting that redemption draws near.
The key to Sirius will be a combination of various metrics — to include subscriber acquisition costs (which I expect to fall for Sirius XM in the 3rd), negative EPS mitigation (reducing the costs!), and financing. Churn will be a postitive or negative factor as well. Sirius can acquire many, but if many leave, the company contracts horribly if growth and SAC should change not to their favor. Don’t be fooled by pumper posts, people. Look at the hard fundamentals. SUBS DO NOT MATTER, IMHO!!!
WHAT IS IMPORTANT: The Best of Sirius package will likely make it easier to assess the advertising value to the howard stern show! Think about it a bit…
All I can say is that another bad day like this and Sirius is at .35 cents again, so going all in here could be an ouch again.
It’s hard to be “patient” when the value of your stock has gone from a healthy chunk of savings to chump change I keep in my freakin’ drawer.
I’m totally impatient right now as I want to hear news from a company in which I own 15,000 shares. And not the same b.s. Mel spews each month that gets us nowhere, if not into a bigger hole.
Really, don’t tell me to be “patient,” just tell me to continue to be “stuck” in this shithouse stock.
Brandon, I am not sure if it was a typo or if it was a misunderstanding (that Mel really ment 19.5 million by years end). No offence to Dominic but he has before taken things to literal and not first confirmed the article before starting a rumor off a missprint.
We’re lucky if the # is 19 million by the end of the 3rd quarter.
We’ll find out soon enough with the 3rd Q CC probably in 3 weeks.
SXMInvestor, I think you are correct. I believe if they get 300,000 this quarter they will be lucky. I also think if they have 19 million by end of 3rd Q then Mel may have underestimated the final EOY sub number.
I’m want to believe, but 3Q results, as good as they could be, will probably mean little more than a small quick pop in the current environment. I’m waiting for Q4 to get more shares unless they go below 25 cents…Then I’ll have a little dilemma.
Lots of good comments here, Cost side metrics are EXACTLY where it’s at for the next three months… Hope that sub numbers are a pleasant suprise, but realize that cost cutting effectively will be the bridge to sucessful refinancing in 2009. I will watching for cost cutting info and base further buying more on cost side than ANYTHING else said at this point. Companies that are solvent do not go BK. If Mel wants to show these pricks, (and he does), it gets done by slashing for immediate future. Address the present, then you get a chance to participate in the future…
Hold The Phone!
First, What did Howard say?
Second. Delisting notices come after 180 days. NOT 30 days. Next April is when it would come.
Imagine the cuts taking place to make up for 425 million or so.
Take for example the 80 employees they just let go from XM. Let’s just say they cost the company 50k each, so this will only be 4 million cut or less than 1% of the # Mel is trying to get to.
Basically the yearly cost of Mad Dog. 80 for 1